Malusi Gi­gaba, Page 18 REVISING BUSI­NESS

Putting con­text into govern­ment’s growth plan of ac­tion

The Star Early Edition - - BUSINESS REPORT - Malusi Gi­gaba

LAST week we an­nounced govern­ment’s re­sponse to the re­ces­sion, an ac­tion plan linked to the 9-Point Plan for Eco­nomic Growth. It aims to ac­cel­er­ate progress, co-or­di­nate govern­ment ef­forts, and act as a mech­a­nism for ac­count­abil­ity.

Since as­sum­ing the fi­nance port­fo­lio, we have en­gaged ex­ten­sively with busi­ness stake­hold­ers – across sec­tors, es­tab­lished and emerg­ing – on our eco­nomic growth pro­gramme.

The key mes­sage that emerged from busi­ness was that two broad sets of ac­tions were re­quired to re­vive busi­ness con­fi­dence: pro­vide pol­icy cer­tainty in a range of ar­eas where key de­ci­sions and leg­is­la­tions have been pend­ing for years (min­ing, telecom­mu­ni­ca­tions spec­trum, broad­band roll­out, land re­form), and re­vi­tal­is­ing key state-owned en­ter­prises, es­pe­cially Eskom and SAA.

With re­spect to pol­icy cer­tainty, busi­ness has said to us, un­der­stand­ably, that for it to in­vest in these ar­eas, it needs to know what the pol­icy land­scape is go­ing to be. In the case of telecom­mu­ni­ca­tions spec­trum, the state needs to ex­er­cise its li­cens­ing func­tion to un­lock eco­nomic ac­tiv­ity.

Own anal­y­sis

As the de­part­ment re­spon­si­ble for man­ag­ing govern­ment guar­an­tees of Sta­te­owned com­pa­nies (SOC) debt, we are acutely aware of the need to en­sure that our SOCs are well gov­erned and man­aged, and have sus­tain­able busi­ness plans.

Our dis­cus­sions with busi­ness re­in­forced our own anal­y­sis, that much of what needs to be done to re­store the con­fi­dence of eco­nomic ac­tors to spend and in­vest, has al­ready been iden­ti­fied.

The 9-Point Plan is our eco­nomic growth and re­form agenda; we need to im­prove its im­ple­men­ta­tion, not re­place it.

This speaks to valid crit­i­cisms that have been lev­elled at the govern­ment for years. Stake­hold­ers have com­plained that we gen­er­ally de­velop sound poli­cies, but are let down by slow de­ci­sion-mak­ing and poor im­ple­men­ta­tion, that de­part­ments work in si­los and of­ten at cross pur­poses, or that we too of­ten come up with new pro­grammes with­out im­ple­ment­ing the ones we have.

These crit­i­cisms are valid to var­i­ous de­grees. We do have to work within the con­straints of govern­ment, in ac­cor­dance with leg­is­la­tion and reg­u­la­tions which are time-con­sum­ing to en­act and amend.

Still, the govern­ment can and must work better to achieve our de­vel­op­ment ob­jec­tives.

In sev­eral in­ten­sive en­gage­ments with the Pres­i­dent and fel­low min­is­ters af­ter the re­ces­sion was con­firmed, we spoke frankly about the concerns raised by busi­ness and other stake­hold­ers.

We all shared a sense of ur­gency to ac­cel­er­ate the pace of struc­tural re­forms, to lay the plat­form for higher growth. The Pres­i­dent asked de­part­ments to com­mit to the short­est re­al­is­tic time lines for the 14 key ac­tions which were iden­ti­fied. He has made it clear that he ex­pects these time­lines to be met. They have been com­mu­ni­cated to the pub­lic so that stake­hold­ers can hold de­part­ments ac­count­able for de­liv­er­ing on these.

Ac­tion plan

What is im­por­tant about the ac­tion plan is not whether the ac­tions therein are new. Most are not and we make no pre­tence that they are. What is im­por­tant is that it rep­re­sents unity of pur­pose, an ac­tion-ori­en­tated ap­proach, and en­ables ac­count­abil­ity.

By com­plet­ing these struc­tural re­forms, we will lay a plat­form for higher growth, im­prov­ing busi­ness and con­sumer con­fi­dence, and re­mov­ing bind­ing con­straints. It won’t hap­pen over night.

We’ve made progress in re­solv­ing the en­ergy chal­lenge, mov­ing from scarcity to sur­plus, and im­prov­ing labour re­la­tions. Eco­nomic ca­pac­ity that was lost due to elec­tric­ity con­straints and work­place con­flict will take time to re­con­sti­tute.

Our econ­omy has sig­nif­i­cant ad­van­tages com­pared to our peers which we some­times over­look. As we con­tinue to re­move bind­ing con­straints and pro­mote key sec­tors, we are con­fi­dent that growth will re­sume, and more sus­tain­ably so.

We have of­ten said that im­prov­ing busi­ness con­fi­dence is the cheap­est eco­nomic stim­u­lus that govern­ment can im­ple­ment. A first step to­wards achiev­ing this is for the govern­ment to de­liver on its to do list. By the medium-term bud­get pol­icy state­ment in October, we will be in a better po­si­tion to look at our eco­nomic fore­casts, and an­nounce a fur­ther eco­nomic sup­port pack­age, build­ing on this ac­tion plan. Malusi Gi­gaba is the Fi­nance Min­is­ter.

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